The Labor-Leisure Tradeoff

Economics over the twentieth century became increasingly dominated by mathematical tools to solve economic questions. This modeling process gets rid of what is interesting in economic analysis. It makes economics all about sophisticated mathematical models instead of trying to understand why and how human beings make decisions and respond to individual incentives.

One of the fallouts of this type of thinking is the “labor-leisure tradeoff.”

Economists theorize that individuals seeking to maximize their utility (happiness) supply a certain amount of labor, and the tradeoff for supplying labor is that you give up leisure. Neoclassical economists even came up with a little equation which attempts to help us understand how and why people decide to supply their labor, and how much leisure people are willing to forgo.

The assumption is that we all want to consume more leisure, but we can’t because leisure has no monetary payout. Labor does.

So Why Do People Work?

Reducing these types of questions to formal mathematical equations does little to help us understand why people work. As Christians we are called to view our work in an entirely new way. For Christians, work is something more than what you have to do to be able to afford your mortgage or go on vacation each year.

That’s why at IFWE we talk about work in terms of your calling. You are created uniquely and have something to offer to the world. You have a real contribution to make through your work and that contribution can have lasting significance for the Kingdom of Christ, even if you are flipping burgers.

We need to focus on our gifts, understand ourselves, and prayerfully seek discernment from Christ in our lives. This is how we are to best steward our scarce resources, the most scarce being our time. It also means that we can derive value, fulfillment and happiness from our work. Scriptures is clear that not only is work good, but also it’s something God wants us to enjoy. Ecclesiastes 3:22 states:

So I saw that there is nothing better for a person than to enjoy their work, because that is their lot. For who can bring them to see what will happen after them?

If we are focusing on our gifts, we are much more likely to derive satisfaction from our work. One of the economic principles we have discussed is subjective value. We all value things differently, which makes sense since we are each unique. This opens up an almost unlimited set of possibilities for how you can contribute your gifts to the world (if there is economic freedom).

The labor-leisure formula can’t possibly capture this. Nor can it help us understand that while rest is important and needed, work is what allows us to be productive, creative and focused on serving others. Work can provide a great sense of fulfillment, because it’s what God made us to do, regardless of whether it’s paid or volunteer work.

Today’s culture provides a much different narrative of work than what we read in scripture. Being born and raised in Washington DC, I have witnessed the worst of this. People work 80 or 100 hours per week in jobs that they are not called to do, so they are miserable. They work hard to get nice things, or perhaps for power without regard to the impact on their families.

Those aren’t reasons we as Christians should be working hard. True fulfillment gets lost when you spend 100 hours at work for all the wrong reasons. It’s a void that can never be filled because there is always more money to be made and more stuff to be had.

Embracing the notion that each of us is unique, precious, and possesses something different to contribute can liberate us from the current cultural narrative. It allows us to focus in on what God is calling us to do in the here and now.

Dr. Anne Bradley

Anne Bradley, Ph.D. is the George and Sally Mayer Fellow for Economic Education and the academic director at The Fund for American Studies. She also serves as the Vice President of Economic Initiatives at the Institute for Faith, Work & Economics. She served as co-editor and contributing author to IFWE’s Counting the Cost: Christian Perspectives on Capitalism (Abilene Christian University Press) and For the Least of These: A Biblical Answer to Poverty (Zondervan). Anne received her Ph.D. in Economics from George Mason University. She is a visiting professor at Georgetown University and has previously taught at George Mason University and at Charles University in Prague.

“True fulfillment gets lost when you spend 100 hours at work for all the wrong reasons. It’s a void that can never be filled because there is always more money to be made and more stuff to be had.”TwitterFacebook